The bid appears to show investor confidence in the coal industry and looks set to blunt Opposition leader Tony Abbott's attack on the carbon price, which he said yesterday would "destroy" the coal industry.

Ms Gillard welcomed the news this morning, saying: "You couldn't get a better indication that business people see a good future in coal mining in this country.

"It does pay when you are looking at businesses to track where the money's going - and where's the money going today?" she asked on AM.

"Well, it's going into buying an Australian mining business. People would only do that if they thought it had a great future."

But Opposition treasury spokesman Joe Hockey says it is not that simple.

He says there are a range of issues that could be behind a takeover bid.

"I leave these issues to the market but... there were a lot of takeovers of banks during the global financial crisis," he said.

"I'm not saying Macarthur Coal is in distress, but there are a whole lot of strategic issues that might be at play in that takeover."

Talking to miners at a coal mine in the New South Wales Hunter Valley yesterday, Mr Abbott warned that jobs would be lost under the carbon tax.

"Yes, we've got to reduce emissions but we don't reduce emissions by destroying an industry which is vital for our national life and vital for our national prosperity," he said.

Saying he had "staked my political life, what's left of it, on stopping this carbon tax", he added that: "I figure for people in the coal industry, it's a hit on your potential employment and it's going to be a hit on your standard of living."

Macarthur Coal declined to comment this morning.

Yesterday the Australian miner released an announcement on the ASX, saying the board was yet to make a recommendation on the takeover bid.

Jobs growth

The Greens have said the ultimate fate for coal is that the industry will be phased out in favour of renewable energy, but Ms Gillard forecast jobs growth.

"We'll be working with the coal mining industry. We've got $1.3 billion in the package to work with gassy mines and we will continue to see employment in coal mining grow."

Resources analyst Gavin Wendt from Minelife says Macarthur is very attractive, irrespective of a carbon tax.

"It will obviously be a factor, but the key thing is that companies like Peabody want exposure to the best coal deposits," he said.

"They have obviously weighed up the risks in this instance. Given that there aren't many other opportunities for PCI [pulverised coal injection] coal in the world they have decided to make a bid for Macarthur Coal."

The Construction, Forestry, Mining and Energy Union (CFMEU) says the takeover bid makes a mockery of the industry's "scare campaign" over the carbon tax.

"The coal industry tells one story to the public with their scare campaign and another story to the markets," CFMEU president Tony Maher said.

"We know what's happening and the workers know what's happening. They listen to these scare campaigns and they see their mine is doubling in capacity, the ports are doubling in capacity. So it's all a nonsense."

But Australian Coal Association executive director Ralph Hillman says he has not been saying the industry will collapse.

"There will be fewer projects go ahead with this tax, there will be some mine closures. we estimate up to 18," he said.

"But there still will be an Australian coal industry and there will be some very profitable entities and very profitable mines within that industry."

The takeover announcement may be good news for the Gillard Government, but two opinion polls - taken before the carbon price announcement on Sunday - have the Government in deep trouble.

The latest Newspoll published in The Australian newspaper shows the Coalition's primary vote has risen three points to 49 per cent.

Support for Labor has dropped three points to an all-time low of 27 per cent.

On a two-party preferred basis the Coalition has recorded Newspoll's second highest vote of 58 per cent, and Labor its lowest of 42 per cent.

And the Essential poll published yesterday showed that on first preferences the Coalition leads Labor 50 per cent to 30 per cent and, after preferences, the Opposition leads by 57 points to 43 points.

In her resignation from politics, Kelly O'Dwyer said she feared another miscarriage in Canberra, far from home. Her announcement is shocking for more than just party-political reasons, writes Emma A. Jane.